Energy Access in Emerging Economies with the U.S. Senate

November 2, 2017

On November 1st, João Talocchi, Campaigns Director of Purpose Climate Lab, testified in front of the US Senate Committee on Foreign Relations’ Subcommittee on Multilateral International Development, Multilateral Institutions, and International Economic, Energy and Environmental Policy about the need to go 100% renewable and the role of renewables in energy access in emerging economies.

“The smarter option is to create the conditions for markets to deliver energy access through decentralized renewable energy, which can happen in a much shorter term. The benefits of jobs, resiliency, reduced air and water pollution, avoided climate change emissions, increased school performance and new opportunities for social and economic development cannot be ignored or delayed.”

Read João’s testimony below and watch the video here of the full hearing of the Committee on Energy and International Development.

João Talocchi Testimony, Energy and International Development Hearing, November 1st, 2017

Chairman Young, Ranking Member Merkley, Members of the Committee. Thank you for inviting me to testify on the important issue of energy access in emerging economies.

I was once in a community in the Amazon that wasn’t connected to the grid when the diesel generator was turned on. Putting aside the less than optimal way that diesel was stored and handled, I was struck by one thing. The noise. I asked a villager if it bothered him. And his answer was “a little, the worse is we can’t hear the snakes”.

Senators, providing energy access to the 1.2 billion people around the world that lack access to electricity is a fundamental step to improve their social and economic conditions, and that of their countries. To do so, we need to focus on the best solutions, those that are fast to deploy, affordable, safe and effective.

To address this need, policy makers face two distinct options, extend the infrastructure of a centralized electricity grid or provide local renewable energy solutions. To date the primary approach to solve this problem has been to increase grid connectivity. But progress has been slow, and the number of underserved households is expected to decline by only a few percentage points over the next few years.

The problem is that it makes little economic sense to extend and maintain the grid for long distances, over rivers and across mountains, with costs at the tens of thousands of dollars per mile, just to sell under priced electricity to a few houses. Utilities frown at this. Even if the grids reach these remote places, the utilities need to wait for subsidies that are slow to come. Or they need to spend money to send people to collect money from villagers that either can’t or don’t want to pay, because the electricity services are poor and power cuts are constant.

As populations grow, this all-or-nothing grid based approach will continue to leave millions in the dark.

Decentralized renewable energy systems, especially those with storage capacity, are a much smarter solution. These technologies, like solar, wind, hydro and biomass, can operate in multiple configurations, from simple individual or home systems to more complex local mini-grids or even as a complement to regionals grids. They can work for a few hours or provide 24×7 power.

Renewable energy technologies are independent and resilient, relying on locally available and free fuels – the sun, wind and water, and don’t depend on supply chains or power lines that cost a lot and can be disrupted by various factors, as conflict or natural disasters. Just think about Puerto Rico.

But, some will say, many governments tried to install solar systems before and those experiments failed. I myself have seen many solar panels from the 80s serving as doors to chicken coops in remote communities. The technology is not to blame. The problem was the approach. Public agencies installed these systems and left. The first time something went wrong and no one came back to fix it, that was the end of it.

Many governments are learning that lesson and instead of doing it themselves, are working to create enabling environments for small and medium local enterprises. These enterprises can build deep rural distribution networks for renewable energy solutions, as well as customer trust. Because their returns depend either on products working well or the sale of electricity, they are bound to offer guarantees, after sales support and perform repairs.

Decentralized renewable energy for energy access needs to be a business.

This is already starting to happen. Because renewable energy solutions are scalable, it’s possible to reach communities in weeks instead of years, and to do that in economical terms, offering enough power at a price that can be afforded and that makes business sense for all involved.

This is a shift from the “all or nothing” approach based on grid connections. It creates a new model based on entry-level power and the concept of an energy ladder.

Communities can use their new sources of energy to keep small businesses open a bit later, store products in refrigerators and access communications and banking services. Decentralized renewable solutions are being used for irrigation – with solar water pumps – and also grinding, milling, husking, drying, smocking, expelling oils, powering tools and so on. These are all economic activities that provide income. I’ve met a wood worker that tripled his output, just because he had energy. In turn, people can afford more electricity and energy systems can be scaled up. Beyond making existing jobs more efficient, renewable energy solutions create local permanent jobs, for maintenance, payment collection and after sales support.

Energy access for rural communities, strengthened local economies and job creation. It’s a win-win-win for all.

This is a new space and sharp reductions in the cost of generation and storage technologies are helping it grow quickly. The United States can play an important role in supporting it, through technology, innovation and finance.

We can continue to wait decades for the grid to reach these 1.2 billion people. But the smarter option is to create the conditions for markets to deliver energy access through decentralized renewable energy, which can happen in a much shorter term. The benefits of jobs, resiliency, reduced air and water pollution, avoided climate change emissions, increased school performance and new opportunities for social and economic development cannot be ignored or delayed.